Markets could see a 'full-blown' 10% correction: Jim Paulsen

Wells Capital Management's Jim Paulsen told CNBC on Thursday that the ongoing stock selloff could get "a little scarier yet" and that markets might end up in a "full-blown" 10 percent correction.

"Until yesterday, this corrective process has been looked at more as a good thing, a healthy refreshing pause, refreshing values for the long-term bull," Paulsen told CNBC's "Squawk Box." "And that's certainly not how we feel this morning. It gives you a sense that we're getting closer to the bottom here."

The S&P 500 could dip below 1,800 points before hitting the lows of the current selloff, he added.

Corrections occur when share prices drop at least 10 percent or more. As of Thursday morning, the S&P was down 7.8 percent from its recent highs, theNasdaqdown 8.6 percent and theDowdown 7 percent. The S&P would need to fall below 1,817 to reach correction territory.

Paulsen's comments came as U.S. stock index futures signaled another morning of selling on Wall Street. He remained bullish on long-term prospects, however, telling CNBC that investors could get excited about U.S. growth a year or 18 months from now.

In the short term, though, Paulsen anticipates a rocky road ahead for U.S. markets.

"I do think we've got a little more carnage, a little more scare yet ahead of us in the next few weeks," Paulsen said.

"That means people are getting more emotional," Bernstein said on "Squawk Box." "And if they're getting more emotional it means they're not looking at fundamentals. And if they're not looking at fundamentals, that means there's plenty of opportunities out there."

Bernstein attributed tensions on Wall Street to the European Central Bank and its efforts to combat deflation by cutting interest rates and buying up private assets. Rational investors would avoid stocks with European exposure, but the markets aren't acting rationally, he said.

"We're looking for these pockets that have been shorted by every hedge fund's brother," Bernstein said, adding: "When emotions take over, it's fantastic for us."